Court Considers Single Employer Factors

In an adversary proceeding before the federal bankruptcy court in Delaware, the court considered a parent company's liability for its subsidiary's violations of the WARN Act.   In Cruz v. HMR Foods Holding, LP (In re HMR Foods Holding, LP), 602 B.R. 855 (Bankr. D. Del. 2019), the court recognized that a parent company may be liable where the two companies' "have become 'so entangled with [one another's] affairs' that the separate companies ... [are] but divisions or departments of a single enterprise."  To assist in this determination,  the court applied the five-factor balancing test adopted by the 3rd Circuit.  Invoking the standards set forth in the Twombly and Iqbal cases, the court found that the plaintiffs' complaint failed to plead sufficient facts to establish a claim against the parent corporation under the single employer doctrine.